American Addiction Centers (AAC Holdings) received the support of its board of directors and lenders to move forward with a strategic recapitalization plan. The plan is designed to reduce the company’s debt obligations and establish a sound financial platform for long-term growth, while maintaining AAC’s standards for patient care.
AAC’s operations will continue unchanged as the process moves forward over the next four months. All employees and clinical staff will continue to receive their normal wages and benefits.
“We are grateful for the support of our board, lenders, management team and business partners in this strategic recapitalization plan, which is strong validation that AAC remains well-positioned to provide high quality, critical care services to vulnerable individuals while also achieving long-term growth,” Andrew McWilliams, CEO of AAC Holdings, said. “We have been transparent about the need to reduce our debt, and this recapitalization will significantly enhance our financial position, building on the progress we’ve already made to strengthen and improve our operations over the last year. We aim to expedite this process so that we can concentrate on fulfilling our mission: caring for patients in their time of need.”
To implement the recapitalization, AAC filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court for the District of Delaware. Carl Marks Advisors is acting as restructuring advisor, Cantor Fitzgerald is serving as investment advisor and Greenberg Traurig is serving as legal advisor to AAC Holdings.
In advance of the recapitalization, AAC took steps to strengthen its operational efficiency, enhance its marketing efforts in key markets and position the company for growth. With normal operating revenue combined and an initial $62.5 million in incremental financing, operations will continue at all AAC addiction treatment centers across the United States.
“Our No. 1 focus is continuing to provide critical addiction treatment services, which has taken on even greater importance during the COVID-19 crisis,” McWilliams said. “The heightened stress, anxiety, fears and social isolation in this unprecedented time has prompted more patients and their families to seek treatment, pushing demand for our services higher. Even in these challenging times, AAC has proven to be an industry leader in its pandemic response with in-house testing capabilities for both patients and staff, along with stringent safety protocols. This tenacity has given us a critical advantage in being able to continue treating patients when they need us most while minimizing the spread of the virus.”
American Addiction Centers is a provider of inpatient and outpatient substance abuse treatment services.
